Welcome to ‘State of the market’, a series highlighting the various markets of Index Exchange. This month, our Regional Managing Director of DACH & CEE, Joerg Vogelsang, dives into the value of maintaining transparency in the programmatic sphere.
The term ‘black box’ has a lot of different meanings. In aeroplanes, and even some cars, black boxes are used for comprehensive analysis to help identify and rectify the causes of an accident. In the case of the aeroplane, the black box helps to create transparency. When it comes to programmatic, however, the connotation is often just the opposite. Even the most experienced programmatic experts may struggle to pinpoint exactly why a certain impression was sold to a certain buyer.
There are plenty of service providers that promise to optimise these transactions. “Holistic ad server systems” promise “holistic yield optimisation” for the publisher. In reality, the large number of technical partners involved can cause confusion. This confusion — thanks to GDPR — is now also being felt by users. What’s more is that the holistic optimisation solutions rarely allow for a look under the bonnet – ultimately weakening transparency.
Why we need transparency
It is precisely this lack of transparency that prevents advertisers from making effective use of the advantages of programmatic advertising. According to a study by the IAB, over 55 percent of an advertiser’s spend never reaches a publisher. Under this circumstance, programmatic advertising’s promise of efficiency and efficacy can never be fulfilled. Transparency must remain relevant for a business as digital budgets continue to grow.
The importance of header bidding
In this spirit, it’s good news that header bidding is on the rise. This means that an impression is no longer subject to the technical strengths and weaknesses of a single SSP or exchange. Rather, an advertising budget can be used to search for the best technical connection in real time. Hidden markup fees no longer stand a chance, excessive transaction costs will be automatically eliminated and insufficient cookie match rates will be a thing of the past. Advertisers will finally gain access to their desired audiences, while publishers will retain full control over their inventory.
Moving transparency forward
In conclusion, transparency is more than just a noble promise for advertisers – it is the key to success in programmatic advertising. Transparency will guarantee that the programmatic transactions will continue to be relevant for advertisers. And header bidding is the tool that will guarantee that transparency.